Management/ Secondary Buyout
Founded in 1986, FMG is a “deep outsourcing” specialist in the vehicle fleet sector. The core business provides fleet incident management services for a range of clients including insurance companies, corporates with large car fleets and vehicle leasing companies. In addition, FMG also provides specialist roadside recovery services for the Highways Agency along with a number of police regions and local councils.
Investment by Endless enabled one of Yorkshire’s most successful entrepreneurs, Andrew Cope, to lead a management buyout (“MBO”) of FMG. Having led Zenith, the vehicle leasing business that he co-founded in 1989, through five successful private equity buyouts between 2003 and 2014, Andrew had joined FMG in April 2014 as Executive Chairman, with a strong agenda to revitalise and grow the business.
Having introduced a number of new management personnel to the operating Board of FMG in subsequent months, Andrew believed the time was right to look at an MBO to give the existing team a greater stake to drive the business through its next phase of development, while allowing an exit for existing financial investors.
While the business had elicited interest from a number of trade and private equity players, Andrew was keen for any deal to be executed quickly, in order to avoid the distraction of a lengthy auction process and ensure the senior team could focus on driving some of the exciting new business and profit development opportunities available.
Having quickly established the quality of the opportunity, Endless mobilised to ensure we could offer Andrew and the team a unique proposition – full funding to support the MBO, unconditional on bank funding and executed in less than 3 weeks.
Carrying out all of our financial, operational and commercial due diligence in house, and with a rigorously focused approach to risk issues, we were able to quickly substantiate the investment case and win full investment committee support for the deal. An upfront approach to tackling any key negotiation issues on the sale and investment documentation to the deal also ensured the legal process was highly streamlined. As a result, we were able to exchange on the sale only two and a half weeks from agreeing exclusivity.
Andrew Cope comments as follows on the role played by Endless in the original acquisition:
“We were very lucky as we had a lot of investors keen to support our plan, for which we are very grateful. We chose Endless to invest with us as they have a remarkable way of transacting, which is so much faster and more attune with what management teams want than anything I have experienced in the six buyout processes I have now been involved in.”
Andrew Cope, Executive Chairman, FMG
The announcement of the management buyout brought FMG to the attention of the sector and in particular to Redde plc, an AIM listed support services group. As a natural strategic buyer for FMG, Redde was keen to promptly progress the acquisition."
The acquisition by Redde in August 2015 allowed Endless to realise their investment much earlier than expected. The FMG management team, led by Executive Chairman Andrew Cope, reinvested a significant part of their equity proceeds as part of the transaction and will remain on board to help drive the business under Redde’s ownership.
Mathew Deering comments on Endless' exit to Redde plc:
“We did not expect to be engaging with strategic buyers of FMG for quite some time yet, but we could not ignore the approach of the Redde board or the recommendation of the management shareholders to accept the offer.
At the same time, this delivers a strong return to our investors. While we regret we will not get to work with the FMG team for longer, we know they are going to an excellent home and wish FMG and Redde every success in future as a combined business.”
Mathew Deering, Partner, Endless
FMG is a great example of Endless’ ability to offer market leading speed of transacting to help management teams seize opportunities when the time is right – not 6 months’ later!